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Tax simplified, er, Italian style

[29 July 2010] In the next stage of the bureaucracy ‘bonfire’ (see ‘Over-regulation conflagration: justification for celebration?’ and Pikestaff 39), the Chancellor and Exchequer Secretary have launched the Office of Tax Simplification (OTS) to ‘unravel the spaghetti bowl’ of complex tax laws.

But will the mixed-metaphor move lead to anything better than burnt bolognese? Chancellor George Osborne said: ‘Two years ago I promised to create the Office of Tax Simplification. Today, we’re delivering on that promise. With its independent, expert advice it will be a permanent force for a simpler tax system. Simpler, more competitive taxes will help us show the world that Britain is open for business. Over the last 10 years, the UK tax code has doubled to more than 11,000 pages and the country has slipped from seventh to thirteenth in the World Economic Forum’s Global Competitiveness Index. In its first year, the OTS will review tax reliefs and small business tax.’

The business world seems to have welcomed the OTS although many are sceptical that real change will occur. For example, tax lawyer Robert Macro said the new body ‘will certainly help trim the fat around the edges but it won't in any way make Britain a low tax jurisdiction’. And condemning as foolish the reaction of the Trades Union Congress that it might be a ‘softening-up exercise for tax cuts for the rich’, the Times objects to the Chancellor adding ‘an extra wing to Britain’s bureaucracy’ by creating a new office. For more information, see the OTS’s website at http://www.hm-treasury.gov.uk/ots.htm.

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